Fabio Capello insists that David Beckham's club form suffered as he struggled to come to terms with Steve McClaren's decision to drop him from the England squad. But the Real Madrid coach believes the midfielder is finally becoming his old self again having overcome the psychological blow of his international ostracism.

"Beckham is an outstanding professional," he said. "He always gives his best both in training and when he is playing, I firmly believe this. But you also have to keep in mind that a coach needs to have the overall picture in his head in order to achieve certain results. In Beckham's case, he has had bad times after being left out of England's squad. Those are moments which produce psychological difficulties.

"Now he's regaining all his composure. The other day in the Champions League he played very well and now he seems to have become the Beckham we once knew. But I think the hardest test for him was to stop being captain of the England team."

Beckham has admitted that he is "frustrated" and "unhappy" at his lack of opportunities at Real but he has been a brighter presence in recent weeks and Capello added: "I've always said he should be with us. He is a unique professional. I love professionals and not only professionals but also good players, two very important things."

However, while it is clear that Capello sees Beckham as a disciplined and dedicated squad player, he has publicly insisted that the contract negotiations do not depend on him. He has advised Madrid to renew the midfielder's contract - but not at any price.

He has also admitted that he prefers to have a left-footed player on the right-hand side so that they can cut inside and run at goal. That leaves Beckham - who Capello considers a right midfielder rather than someone who can play in the centre - behind several players, including Raúl, Robinho and José Antonio Reyes.

Privately, too, the Italian believes Beckham is a man for the occasional game or run of games, an alternative who offers Real guarantees, rather than a regular starter. And that could have important consequences for Beckham's future.

"We want to renew his contract and we have had several meetings with his people,"Real's sporting director, Predrag Mijatovic, said on Monday. "On our part there is no problem, but we have to listen to the player, too. He wants to continue but only as long as he is playing. He wants to wait a little longer to see if he gets back in the team [but] we can't guarantee anyone a place in the first team."

With the former England captain free to speak to other clubs from January 1, a new contract at Real Madrid continues to look unlikely.